Danske Bank has said that impairment charges are likely to continue increasing at its Irish operations for the next two years and could reach €942m between now and the end of 2014.
In an outlook statement on its banking operations here, which have been trading as National Irish Bank (NIB), the Danish group said: “The Irish economy shows no prospect of material improvement over the next couple of years. The domestic property market remains weak, and the decline in property prices is expected to continue and result in additional impairment charges against the Irish loan book.”
It expects to recognise impairments in Ireland of between 5m-7m DKK (Danish Krone) between now and the end of 2014 (the top end of that scale equating to €942m) before levels “reach a normalised level” in 2015.
Yesterday also saw the publication of first-quarter results at Danske. On a group-wide basis, it posted a 27% increase in profits before tax and impairment charges were accounted for, to €740m; but those impairments were up from €381m to €527m.
NIB, meanwhile, saw a 3% year-on-year rise in operating profit to €11m, but its first quarter impairment charge jumped from €172m to €195.2m.
Pre-tax losses at National Irish, for the three months, amounted to €184.3m; compared with €161.4m at the same period last year.
NIB’s outgoing chief executive Andrew Healy
said the first-quarter performance had been in line with expectations, given the continuing tough economic conditions and ongoing stagnation in the property market. He said the Irish business has seen “solid growth” in corporate and private banking markets.
Elsewhere, Belgian banking group KBC reported a smaller than estimated drop in first-quarter profits, falling year-on-year from €821m to €380m.
© Irish Examiner Ltd. All rights reserved